Britain signs 859 mln stg ship design contract with BAE Systems

LONDON, Feb 20 (Reuters) - Britain agreed an 859 million
pound ($1.32 billion) contract with BAE Systems on
Friday, giving the green light to the British defence company to
continue with the next phase of design for a new fleet of
warships.

BAE Systems has been working on plans to provide Britain
with 13 new Type 26 complex warships since 2010. The new
contract paves the way for it continue to develop the project by
investing in the equipment and facilities that will be needed
before ship building can start.

BAE Systems, which on Thursday was upbeat about future
defence spending after years of cuts to military budgets, said
the deal built on its long heritage of delivering complex
warships in Britain.

"Through the Type 26 programme, we are transforming the way
we design and manufacture naval ships with innovative new
technologies, leading-edge processes and modern infrastructure,"
Chief Executive Ian King said in a statement.

Britain's Ministry of Defence said the new contract would
sustain 1,700 jobs.

The first Type 26 ship is expected to enter service in the
early 2020s.
($1 = 0.6504 pounds)
(Reporting by Sarah Young; editing by Kate Holton)